ANT/Sharp decline in gas exploration wells drilled in Indonesia

Jakarta (ANTARA News) - The annual number of natural gas exploration wells drilled in Indonesia dropped by as much as 50 percent in the past nine years, oil observer Kurtubi said here on Saturday.

"The problem is that no new reserves were found in the upstream sector," he said adding that before 1998 the yearly number of exploration wells drilled was still recorded at more than 200 but it dropped to 150 in 1998.

The decreasing number of new wells continued in the following years, Kurtubi said. In 1999 there were only 90 gas explorstion wells and the figure declined continuously to 80 in 2000, 62 in 2001 and 36 in 2003.

"There was an increase to 60 in 2006, however," he added.

He said scarcity of liquefied natural gas (LNG) supplies to several industries in the country indicated the depletion of natural gas reserves in Indonesia.

"The real problem was that no new gas reserves were found," he said adding that whatever gas was now in the market had come from old fields.

He said that if gas production could not meet domestic demand, it would also be difficult to carry out agreed export plans and this would affect the importers.

The only way for the government to solve the problem was to amend Law No. 22 / 2001 on Oil and Gas which was hampering gas exploration investment, he said.

He said recently that investment in Indonesia had been made even more difficult by the adoption of illogical procedures such as the lengthening of the investment licensing procedure.

Previosly, an invstment license could be obtained by completing formalities through various agencies functioning under one roof but now the investor`s application had to pass through at least five offices, he said.

On oil wells, he said in the 1980s and 1990s, some 250 new oil wells were explored annually but since 2000, only about 60 new wells a year had been explored. There was even a period when only 30 wells were explored a year.

Kurtubi said geological research had shown that Indonesia still had oil and gas reserves totaling 80 billion barrels which were enough to meet the country`s needs over 100 more years. (*)

They forgot to mention that new Gas Wells prospects, because of the fact that they are situated in the relatively unexplored deep water areas cost much more to drill with no guarantee of a find. This costs substantially more than an onshore "oil well" exploration due to the higher technology which has to be employed to drill in this environment.

Add to that the prices that the government wants to buy the gas for as against the worldwide selling price for gas, the whole deal is unnatractive.